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Does Microsoft Need China?
angkor writes "Does Microsoft Need China? Interesting article from CFO.com's perspective on MS pricing strategies in the developing world: 'Put another way, Microsoft is relying on current pricing and a goodly portion of the world's tech growth to sustain its 31 percent net profit margins. But an increasing portion of global tech growth will come from Asia's burgeoning economies. And it's precisely in Asia--with China in the lead--that pressure to alter the uniform pricing structure for its software is the strongest in the world...'"
I predict that in 20 years, a Chinese OS is dominating market share in eastern countries. There's no way that a workforce of that size, with increasing technological skill, won't be able to compete with a floundering US economy. China is not about to bind itself to a major western corporation, at least not in a way that involves shipping product IN to the country, rather than the traditional OUT.
But I'm only a history major...
I think the answer to that question is an undisputed "no", and that's why the reversed was asked.
As you stated, China doesn't need Microsoft, as they have shown again and again that they are able to produce/reverse engineer (depending on your point of view) something a comparable or better (as in more suited to their needs) product than the west.
Thus the original question, "Does Microsoft Need China?" is the true discussion point. IE: Asking the reverse: "Can Microsoft continue to grow the marketshare at the rate expected by its executives and investors if it loses the billion and a half potential consumers found in China". I think the answer is probably "Yes, they can, but not under their current business model", so the longer answer to the original question is:
"No, Microsoft doesn't need China, but they need to come up with a refreshed business model that reflects this".
All business models have cycles, and Microsoft's has lasted a lot longer that it should have.
Norman Cook's Ode to Sl
The question is not if MS *needs* PRC, but how does it get the maximum amount of money of it.
Because of the piracy and other situation, the optimum pricing strategy in China might well be different from of other countries.
Microsoft knows that the market in the developing countries in Asia is not in the home segment but in the corporate and government segment.
The home segment will continue to pirate software as there is little enforcement of law, if they exist, and primarily because it is so much cheaper to buy pirated copies.
For example here in India the cost of a pirated copy of windows is 1/10th of the cost of a legit copy. Nobody cares about support anyways.
The government offices are the next target. In Asia and specially in countries like communist China the biggest employer is the government. So you can easily guess that more people=more desktops=more sales. But Microsoft is frustrated that it cannot use it's traditional tactics of getting people to resist change by not switching from windows as in most cases people are starting out from scratch and if they latch on to Linux as a desktop OS they will resist changing from that as that is what they have been used to. An example is how the Chinese goverment is developing it's own version of Linux to counter dependence on Microsoft.
It will turn out to be an interesting fight.
Hmm...Here's an interesting (maybe) thought. If China begins to use Linux as an alternative to windows, will they contribute their changes back to the community? China has no real incentives for doing so other than to keep on a standard. Other arguments suggest that China does not want to be dependant on a US corporation, so I can imagine a "Western" standard is no better. If China does not contribute back its changes is there any way to enforce the GPL? Somehow I don't think the WTO will be interested in defending the GPL. My guess is that the WTO is not a big fan of the GPL as it threatens IP and profitability of software trade.
I tried for 5 years to come up with a clever sig...only to realize that I am not clever.
Wonderful question with an obvious answer:
No. Not a chance in hell.
The chinnesse gvmnt will need their ugly spyware to remain out of the hands of smart chinnesse citizens.
So, what are we going to do about it?
I think we cannot do much. But it might be leveraged by Microsoft to single out linux as something that the Pinkos use to opress the chinnesse people, which will be true, although slightly out of context.
NO SIG
M$ knows that outsourcing of IT projects will not go away. As such, getting into china ahead of Open-Source offerings will help to strengthen their hold in the higher level IT market.
This strategy has worked with India as they pump out so much M$ crap that it scares me.
Remember that China is not signatory to the international copyright agreements. There is absolutely nothing compelling them to play nice in this regard, or any other.
They may *choose* to do so because it behooves them, but they simply cannot be bullied.
China has historically referred to itself as 'The Middle Kingdom', implying that they're at the centre of the earth. For any other nation, this might be seen as hubris. For China, it's axiomatic.
Crumb's Corollary: Never bring a knife to a bun fight.